Guest DMP Posted March 13, 2007 Share Posted March 13, 2007 A company has ceased doing business for all intents and purposes and one employee that terminated employment has requested an immediate distribution. Is an immediate distribution required? The trustee would like to wait until the expiration of one year before making any distributions in order to ascertain the employees' exact interest in the plan. Link to comment Share on other sites More sharing options...
Bird Posted March 14, 2007 Share Posted March 14, 2007 Until the plan is terminated, the provisions of the plan continue to control. So it depends on what the plan says. Ed Snyder Link to comment Share on other sites More sharing options...
Guest DMP Posted March 14, 2007 Share Posted March 14, 2007 THe Plan requires that distributions be made to a terminated participant after a one year break in service. The trustee wants to wait but the terminated employee is becoming a real thorn in his side wanting and immediate distribution and I am not certain it is worth waiting. Link to comment Share on other sites More sharing options...
Bird Posted March 14, 2007 Share Posted March 14, 2007 I wouldn't pay him out unless the plan is terminated, or amended to change the timing of distributions. Ed Snyder Link to comment Share on other sites More sharing options...
david rigby Posted March 14, 2007 Share Posted March 14, 2007 However, the plan may be terminated. A plan cannot exist w/o a sponsor, so the "demise" of the company may automatically terminate the plan. A thorough analysis of the facts and circumstances of "...ceased doing business..." is appropriate. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice. Link to comment Share on other sites More sharing options...
Guest DMP Posted March 14, 2007 Share Posted March 14, 2007 Perhaps, my use of the phrase "ceased doing business" was a bit extreme. We are talking about a professional corporation that had two shareholders and several other employees. One shareholder terminated his employment, taking a couple of employees with him. The employees that stayed initially are now gone. The remaining shareholder is not currently practicing his profession but he has no present intention to dissolve the corporation. Therefore the plan should still have a sponsor. Would one alternative be to seek a dl regarding the status of the plan (partially terminated / terminated)? Wouldn't this effectively prolong the distribution (i.e. waiting until the corporation receives the dl to make distributions)? Link to comment Share on other sites More sharing options...
Bird Posted March 15, 2007 Share Posted March 15, 2007 Would one alternative be to seek a dl regarding the status of the plan (partially terminated / terminated)? Wouldn't this effectively prolong the distribution (i.e. waiting until the corporation receives the dl to make distributions)? You already have a means of "prolonging" the distribution - following the terms of the plan. I don't see the need to do anything more. I'm not saying that you shouldn't apply for a DL but that's a different issue. Ed Snyder Link to comment Share on other sites More sharing options...
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